Class 7 Social Science Chapter 12 NCERT Book - Understanding Markets

 Page 1


247
Economic Life Around Us  
12 – Understanding Markets
Understanding  
Markets
Prosperity emanates from the market that develops when 
people need goods and services that they can’t create 
themselves.
– Adam Smith, 18th century economist
CHAPTER
12
The Big 
Questions
1. What are markets and how 
do they function?
2. What is the role of markets 
in people’s lives? 
3. What role does the 
government play in markets?
4. How can consumers assess 
the quality of goods and 
services they purchase?
In the picture on the following page you will see people buying 
and selling goods?—?vegetables, fruits, clothes, groceries, mobile 
phones, refrigerators, and so on. These goods result from 
various types of economic activities?—?primary, secondary, and 
tertiary?—?that you studied in Grade 6. But how do these goods 
reach us? 
Fig. 12.1
Chapter 12.indd   247 Chapter 12.indd   247 4/8/2025   11:21:27 AM 4/8/2025   11:21:27 AM
Page 2


247
Economic Life Around Us  
12 – Understanding Markets
Understanding  
Markets
Prosperity emanates from the market that develops when 
people need goods and services that they can’t create 
themselves.
– Adam Smith, 18th century economist
CHAPTER
12
The Big 
Questions
1. What are markets and how 
do they function?
2. What is the role of markets 
in people’s lives? 
3. What role does the 
government play in markets?
4. How can consumers assess 
the quality of goods and 
services they purchase?
In the picture on the following page you will see people buying 
and selling goods?—?vegetables, fruits, clothes, groceries, mobile 
phones, refrigerators, and so on. These goods result from 
various types of economic activities?—?primary, secondary, and 
tertiary?—?that you studied in Grade 6. But how do these goods 
reach us? 
Fig. 12.1
Chapter 12.indd   247 Chapter 12.indd   247 4/8/2025   11:21:27 AM 4/8/2025   11:21:27 AM
Fig. 12.2
Chapter 12.indd   248 Chapter 12.indd   248 4/8/2025   11:21:28 AM 4/8/2025   11:21:28 AM
Page 3


247
Economic Life Around Us  
12 – Understanding Markets
Understanding  
Markets
Prosperity emanates from the market that develops when 
people need goods and services that they can’t create 
themselves.
– Adam Smith, 18th century economist
CHAPTER
12
The Big 
Questions
1. What are markets and how 
do they function?
2. What is the role of markets 
in people’s lives? 
3. What role does the 
government play in markets?
4. How can consumers assess 
the quality of goods and 
services they purchase?
In the picture on the following page you will see people buying 
and selling goods?—?vegetables, fruits, clothes, groceries, mobile 
phones, refrigerators, and so on. These goods result from 
various types of economic activities?—?primary, secondary, and 
tertiary?—?that you studied in Grade 6. But how do these goods 
reach us? 
Fig. 12.1
Chapter 12.indd   247 Chapter 12.indd   247 4/8/2025   11:21:27 AM 4/8/2025   11:21:27 AM
Fig. 12.2
Chapter 12.indd   248 Chapter 12.indd   248 4/8/2025   11:21:28 AM 4/8/2025   11:21:28 AM Chapter 12.indd   249 Chapter 12.indd   249 4/8/2025   11:21:29 AM 4/8/2025   11:21:29 AM
Page 4


247
Economic Life Around Us  
12 – Understanding Markets
Understanding  
Markets
Prosperity emanates from the market that develops when 
people need goods and services that they can’t create 
themselves.
– Adam Smith, 18th century economist
CHAPTER
12
The Big 
Questions
1. What are markets and how 
do they function?
2. What is the role of markets 
in people’s lives? 
3. What role does the 
government play in markets?
4. How can consumers assess 
the quality of goods and 
services they purchase?
In the picture on the following page you will see people buying 
and selling goods?—?vegetables, fruits, clothes, groceries, mobile 
phones, refrigerators, and so on. These goods result from 
various types of economic activities?—?primary, secondary, and 
tertiary?—?that you studied in Grade 6. But how do these goods 
reach us? 
Fig. 12.1
Chapter 12.indd   247 Chapter 12.indd   247 4/8/2025   11:21:27 AM 4/8/2025   11:21:27 AM
Fig. 12.2
Chapter 12.indd   248 Chapter 12.indd   248 4/8/2025   11:21:28 AM 4/8/2025   11:21:28 AM Chapter 12.indd   249 Chapter 12.indd   249 4/8/2025   11:21:29 AM 4/8/2025   11:21:29 AM
250
Exploring Society: India and Beyond | Grade 7 Part 1
What is a Market?
A place where people buy and sell goods is called a market. 
It is also known as bazaar, haat (in Hindi), and marukatté 
(in Kannada). What is it called in your region? This can 
be at a physical place or, as is becoming popular today, 
online. Goods and services become available to individuals, 
households, and businesses through markets. For a long 
time, people have relied on markets to fulfil their needs 
and wants for goods and services. In addition, markets 
connect people, traditions, and ideas.
Let’s see an example of a market from 16th century India.
The Glorious Hampi Bazaar, Karnataka 
The Hampi Bazaar in Karnataka was one of the prosperous 
markets in the Vijayanagara Empire which was the centre 
of flourishing trade. The bazaar was located opposite the 
Virupaksha temple. The sheer abundance and prosperity 
of the city have been described in many foreign accounts.
The famous Portuguese traveller, Domingos Paes, called 
Hampi “the best-provided city in the world” due to the 
wide variety of products traded in the market— grains, 
seeds, milk, oil, silk, animals like cows, rabbits, horses, and 
even birds like quails and partridges. Another Portuguese 
traveller, Fernao Nuniz, wrote about the bazaar, “There 
were craftsmen, also, working in their streets, so that you 
Fig. 12.3. Hampi Bazaar today
Trade: 
buying and 
selling or 
exchange 
of goods 
and services 
between 
people or 
countries
Needs:  
In economics, a 
need is something 
that a person 
requires to survive, 
such as food, 
water, clothing, 
and shelter
Wants: 
 In economics, a 
want is something 
that a person 
desires but is 
not essential for 
survival.
Chapter 12.indd   250 Chapter 12.indd   250 4/8/2025   11:21:29 AM 4/8/2025   11:21:29 AM
Page 5


247
Economic Life Around Us  
12 – Understanding Markets
Understanding  
Markets
Prosperity emanates from the market that develops when 
people need goods and services that they can’t create 
themselves.
– Adam Smith, 18th century economist
CHAPTER
12
The Big 
Questions
1. What are markets and how 
do they function?
2. What is the role of markets 
in people’s lives? 
3. What role does the 
government play in markets?
4. How can consumers assess 
the quality of goods and 
services they purchase?
In the picture on the following page you will see people buying 
and selling goods?—?vegetables, fruits, clothes, groceries, mobile 
phones, refrigerators, and so on. These goods result from 
various types of economic activities?—?primary, secondary, and 
tertiary?—?that you studied in Grade 6. But how do these goods 
reach us? 
Fig. 12.1
Chapter 12.indd   247 Chapter 12.indd   247 4/8/2025   11:21:27 AM 4/8/2025   11:21:27 AM
Fig. 12.2
Chapter 12.indd   248 Chapter 12.indd   248 4/8/2025   11:21:28 AM 4/8/2025   11:21:28 AM Chapter 12.indd   249 Chapter 12.indd   249 4/8/2025   11:21:29 AM 4/8/2025   11:21:29 AM
250
Exploring Society: India and Beyond | Grade 7 Part 1
What is a Market?
A place where people buy and sell goods is called a market. 
It is also known as bazaar, haat (in Hindi), and marukatté 
(in Kannada). What is it called in your region? This can 
be at a physical place or, as is becoming popular today, 
online. Goods and services become available to individuals, 
households, and businesses through markets. For a long 
time, people have relied on markets to fulfil their needs 
and wants for goods and services. In addition, markets 
connect people, traditions, and ideas.
Let’s see an example of a market from 16th century India.
The Glorious Hampi Bazaar, Karnataka 
The Hampi Bazaar in Karnataka was one of the prosperous 
markets in the Vijayanagara Empire which was the centre 
of flourishing trade. The bazaar was located opposite the 
Virupaksha temple. The sheer abundance and prosperity 
of the city have been described in many foreign accounts.
The famous Portuguese traveller, Domingos Paes, called 
Hampi “the best-provided city in the world” due to the 
wide variety of products traded in the market— grains, 
seeds, milk, oil, silk, animals like cows, rabbits, horses, and 
even birds like quails and partridges. Another Portuguese 
traveller, Fernao Nuniz, wrote about the bazaar, “There 
were craftsmen, also, working in their streets, so that you 
Fig. 12.3. Hampi Bazaar today
Trade: 
buying and 
selling or 
exchange 
of goods 
and services 
between 
people or 
countries
Needs:  
In economics, a 
need is something 
that a person 
requires to survive, 
such as food, 
water, clothing, 
and shelter
Wants: 
 In economics, a 
want is something 
that a person 
desires but is 
not essential for 
survival.
Chapter 12.indd   250 Chapter 12.indd   250 4/8/2025   11:21:29 AM 4/8/2025   11:21:29 AM
251
Economic Life Around Us  
12 – Understanding Markets
saw made there, golden jewels and gewgaws, and you will 
find all kinds of rubies and diamonds and pearls, with 
every other kind of precious stone for sale… sellers of 
cloths… they being of cotton… grass and straw in infinite 
abundance. I do not know who could describe it to be 
believed, so barren a country is this… it is a mystery how 
there should be an abundance of everything therein.”
LET’S EXPLORE 
 Æ Can you imagine what this bazaar must have looked 
like during its peak?
 Æ Do you know of any old markets from your state? 
How would they be similar or different from today’s 
markets? Discuss with elders in the family and 
community.
Let’s learn more about markets and how they function!
LET’S EXPLORE 
Observe the illustration. 
What are these people 
discussing? Imagine you 
and your partner as a 
buyer and a seller of 
guavas. Prepare a set of 
dialogues between both 
of you and present it in 
your class as a skit. 
Certain features are required for places to be called  
markets. As you observed in the figure 12.2 (on introductory 
big spread page number 248) every market has a buyer 
and a seller. They both need to agree on a price at which 
the transaction would take place. Price is an important 
feature in completing a transaction. 
Price:
Price is the 
amount at 
which a buyer 
is willing 
to buy, and 
a seller is 
willing to sell 
particular 
goods or 
services.
Fig. 12.4 
Chapter 12.indd   251 Chapter 12.indd   251 4/8/2025   11:21:30 AM 4/8/2025   11:21:30 AM